Question
Lorray Inc. reported Equipment on January 1 of $430,000 and on December 31 of $392,000. The company also reported Accumulated Depreciation on January 1 of
Lorray Inc. reported Equipment on January 1 of $430,000 and on December 31 of $392,000. The company also reported Accumulated Depreciation on January 1 of $280,000 and December 31 of $313,000. During the year, the company sold equipment with an original cost of $80,000 and a carrying value of $60,000, resulting in a loss of $5,000.
What amounts would be included in the operating activities section of the statement of cash flows?
Select one:
a. Add depreciation expense of $93,000 and subtract loss on sale of equipment of $5,000 from net income.
b. Add depreciation expense of $53,000 and subtract loss on sale of equipment of $5,000 from net income.
c. Add depreciation expense of $93,000 and add loss on sale of equipment of $5,000 to net income.
d. Add depreciation expense of $53,000 and add loss on sale of equipment of $5,000 to net income.
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